Tourists Expenditure on Shopping & Souvenirs
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AJMR Volume 1 Issue 1 2016 Amity Journal of Management Research 1(1), (32–45) ©2016 ADMAA Tourists Expenditure on Shopping & Souvenirs: An Analysis of Association(s) Across Trip Typologies Uttam Kr Baruah Darrang College, Tezpur, Assam, India Mrinmoy K Sarma Tezpur University, Assam, India (Received: 02/12/2015; Accepted: 05/05/2016) Abstract Extant literature reveals that tourists’ expenditures incurred in the destination areas has been less focused and studied. The expenditure is a tool enticing development, poverty alleviation and employment creation within the local economy. Tourists’ expenditures, particularly on items like souvenir purchase, shopping etc., are seen as positive spin-off in the local economic development. Attributing proper value, studies have been conducted involving different dimensions of tourists spending behaviours. Tourists’ propensity to spend higher amount while staying long in the destination area has also been established in research findings. Studies have also been carried out to examine the nature, extent and composition of tourists’ expenditure. In fact, the degree of economic benefit derived may vary across the nature or forms of tourists’ expenditure. Research findings show that expenditures on shopping and souvenirs are very meaningful for the local economy. But the nature of association(s) between tourists trip typologies and expenditure on shopping and souvenirs has not been studied. With the objective of studying the same, a convenient sample survey was conducted among tourists in an emerging tourists’ destination of India. The study results show that tourists incur a sizeable amount on shopping and souvenir purchase. The analyses also show that specific tourists’ profile can be developed on the basis of trips typology and expenditure on shopping & souvenirs. Keywords: Expenditure, Shopping, souvenirs, handicrafts, trip typology, economic benefits JEL Classification: Z-3, Z-32, Z-33 Paper Classification: Research Paper Introduction Tourism has been experiencing immense proposition adding values towards the skills and heritage of local people, therefore, benefitting local economies. Grabbing the opportunity, 32 ADMAA Amity Journal of Management Research Volume 1 Issue 1 2016 AJMR greater attentions are paid by policy makers or bureaucrats in addressing the issues as a means of promoting sustainable development. Similarly, increasing research interests are shown in tourist’s expenditure in destination areas more in terms of the positive spin-offs. As understood, unless tourists’ visit contributes to the economic well-being of the local people, tourism’s very purpose will not be served. A part from revenue contribution for the Government, tourism has been encouraged for a number of reasons such as multiplier effect, labour intensiveness, supplementary income, additional direct benefits to the local community etc. Hence, tourism activities have been considered more in terms of the positive spin-offs and grossly meant as a tool for promoting development, for poverty alleviation, employment creation and preservation of the environment (Bezbarua, 2008). Tourism literature explains the concepts of multiplier effect of tourists’ expenditure on domestic economy. A study by Menente (2000) revealed the consuming habits of tourists of different origins in terms of expenditure level and composition differ. Her research findings show the multiplier effect of tourist expenditure as 1.48 for domestic tourism and 1.56 for international tourism. In another study conducted in the Northeast part of India, Baruah and Sarma, (2013) analyzed tourists’ expenditure and reported the existence of association between the extent of local economic benefits and nature of tourists’ expenditure. Extant literature also covers the broad array of tourist expenditures and underlying factors influencing expenditure in each segment. Trip characteristics, demographic variables, spending behavior & patterns, travel motivation, amount spent on different accounts head etc., are some of the variables taken into account to examine the association with expenditure vis-à-vis economic benefits derived. Expenditure on accommodation, transportation, food & beverages, shopping, souvenir, handicrafts, entertainment, entry fees, local art & craft, clothing, tips etc., are meticulously analysed and discussed Wu, Zhang & Fujiwara, 2013; Anderson, 2010; Sarma & Baruah, 2013; Kent, Shock & Snow, 1983; Kreck, 1985; Godbey & Graefe, 1991; Jansen & Verbeke, 2000; Kim & Littrel, 2001; Littrell, Kean, Gahring, Niemeyer, Reilly & Stout, 1994; Snepenger, Murphy & Gregg, 2003; Sarma, 2004; Oh, Cheng, Lehto & O’leary, 2004; Anyango, Duim & Peters, 2013; Wu, Zhang & Fujiwara, 2012; Alegre & Cladera, 2012; Kinley et al., 2012; Damonte, Collings & Meghee, 2013; Hung, Shang & Wang, 2013; Brinda, Disenga & Osti, 2013). Researchers also identified two factors i.e., amount and pattern of expenditure to have influence on the depth of benefits accrued in the local economy. Mules (1998) and Littrell (1990) reported the existence of ever suspected relationship between economic contributions of tourism (to the local economy) with the amount of expenditure. In his words ‘money which occurs to local residents depends on the amount of tourists’ expenditures’. Again, Sarma and Baruah (2013) found that pitch of economic benefit is also related with the pattern of expenditure. The researchers in this study reported greater emphasis on unplanned form of expenditure for ignition of local economic benefits. In spite of all such studies covering various aspects connected with tourists’ expenditure and economic benefits, still there are areas where either less or no focus has been accorded. Creation of specific tourists profile on the basis of purposes of visits and describing the relationships with the extent of expenditure on items which are locally made will provide a deeper insight into the role of tourism in strengthening the income level or providing the additional means of livelihood to the local people. Literature Review The contribution of travel and tourism to gross domestic product (GDP) has been well recognised. According to an estimate made by Travel & Tourism Competitiveness Report 2009, the contribution is expected to be at US$ 187.3 billion by 2019 (Siddique and Tripathy, 2010). The report also states that real GDP growth for the travel and tourism economy is expected to achieve an average of 7.7 per cent per annum over the next 10 years. Notably, the analyses of expenditures 33 Amity Journal of Management Research ADMAA AJMR Volume 1 Issue 1 2016 incurred by tourists have received considerable recognition from academicians and researchers. Tourist’s expenditure patterns are always important element for tour organizers and marketers when planning, designing and delivering their products (Anderson, 2010). In the words of Zhang, Junyi and Kuwano (2012) ‘Tourist’s expenditure patterns and amount have remained highly influential in the pitch of economic benefits, while Littrell (1990) recounted the association of local income with the pattern of expenditure and amount of goods and services that can be provided by the local community. He further added that as expected, lodging is the sector with the highest percentage of goods and services supplied locally and thus highest potential for generating local revenue. Expenditure on food and beverages and accommodation are other components where substantial amount is spent by tourists. Researchers also discussed expenditure pattern describing the proportion of major expenditure components to tourists’ total expenditure in destination areas. Wellner (2002) in his study conducted in the U.S. measured that the single largest category that visitors’ spend on when they were traveling in 5 states (California, Florida, New York, Texas and Illinois) is the food. Consumers on their trip to these regions spent nearly a quarter of their total travel budget on food in 1998, (totaling $117.2 billion) while lodging accounted for 20 percent of the total vacation bill in the same year. The author also revealed that spending on transportation in US in the same year accounted for 42 percent of all domestic travel expenditures. In total, the domestic and international travelers spent $207.3 billion in these top states. Suosheng and Qu (2004) reported that Chinese domestic tourist expenditures in transportation have the highest proportion (30.4%) followed by food and beverages (16.8%) and least on lodging (15.8%). Visitors spent an average $96.03 a day (Llave, 2005) in Philippines and most of their money was spent on accommodation and food. The 1990 Alberta Non-Resident Travel Exist Survey (Getz, Joncas & Kelly, 1994) estimated that of the total tourists’ expenditures in Alberta in 1991, 20 percent went to accommodations. In another study conducted by Li (1999), it was found that foreign tourists spent 31.8 percent of the trip budget on accommodation alone. Apart from these major heads of expenditure like transportation, accommodation, food and beverages, shopping has been identified as a popular activity among tourists (Kent el al, 1983), which in some cases occupy the second largest component of tourists’ expenditures (Li, 1999). Interestingly enough sometimes shopping is reported to be the major attraction in some destinations drawing tourists to buy (Kim & Littrell, 2001; Moscardo, 2004). Llave (2005) estimated that tourists spend more than 25% ($24.05) of their total travel budget on shopping. In another study conducted by Law